The Independent, 7 December 2001
By Cathy Gordon and Stephen Howard, PA News

[Posted 08/12/2001]

Environmental groups today lost the latest round of their legal battle
to block the opening of a controversial nuclear reprocessing plant.

Three Court of Appeal judges rejected an appeal brought by Friends
of the Earth and Greenpeace over a High Court ruling on November 15
that the Government had made "no error of law" in giving the goahead
for the opening of the mixed plutonium and uranium oxide (MOX) plant
at Sellafield in Cumbria.

Lords Justices Simon Brown, Waller and Dyson unanimously dismissed
the appeal at a hearing in London.

Objectors argue that the Secretary of State for the Environment, Food
and Rural Affairs and the Secretary of State for Health, took a "distorted"
view last month when they decided that allowing the introduction of
MOX was "economically justified" under European Union law.

Environmental groups fear the Sellafield scheme could lead to pollution,
and also become a target for terrorists or theft of nuclear materials.

Lord Justice Simon Brown said he would make no order for costs of
the appeal against the groups as there were two special features of
the case.

The first was that the "public interest in this particular area of
public health and wellbeing is obviously very great and very exceptional"
and the second was that the appellants had succeeded on "one important
point of principle".

During the appeal the environmental groups had argued that the Government's
decision that the MOX plant was "economically justified" was based on
distorted figures and that £470 million construction costs for
the plant were "ignored and disregarded" in assessing its benefits.

Lord Justice Simon Brown said the groups had contended that in evaluating
the economic benefits the Secretaries of State "failed to take into
account the capital costs inherent in the practice".

He said BNFL, which appeared in the proceedings as an interested party,
"intend if possible to take 'irreversible implementation steps' on December
20 2001. Hence the need to decide the challenge urgently".

Rejecting one of the grounds of the High Court decision, Lord Justice
Simon Brown said the groups had rightly argued on appeal that "the capital
costs inherent in a new type of practice (mainly no doubt the costs
of constructing the necessary plant) are indeed a cost of the practice
and relevant, therefore, when evaluating the overall economic benefit
(or detriment) likely to result from adopting the practice".

He added: "Assume, for example, that approval were sought to operate
a number of nuclear power stations and that no such stations had previously
been constructed.

"To my mind it could not reasonably be suggested that the capital
costs of the project should simply be ignored."

But he said the "critical" question was: What if the capital costs
have already been expended?

The appeal judges decided that as SMP was likely to be the only MOX
plant built in this country there was no requirement for the Government
to take into account the costs of construction that had already been
incurred (the 'sunk' costs).

Lord Justice Simon Brown said: "It cannot, in my judgment, be said
that the Secretaries of State were bound to take into account costs
which had already been incurred in constructing SMP, which plainly cannot
be recovered, and which equally plainly are not going to be incurred
anywhere else.

"Secretaries of State are entitled to decide these cases in the real
world.

"To bring into account sunk costs on the fictional basis that equivalent
costs would be incurred were approval to be invoked to operate the practice
elsewhere in the future would be absurd. It would be to sacrifice reason
on the altar of blind theory."

After the ruling the environmental groups involved in the action said
they had won a "partial victory".

In a statement they said: "Friends of the Earth and Greenpeace have
overturned an important part of last month's controversial High Court
ruling that the Government had lawfully given the Sellafield MOX plant
the green light.

"But the MOX plant can still open, despite the fact that it will never
recover its costs and that it represents a serious threat to public
safety."

The statement added: "The Court of Appeal's decision means that in
future, before any new nuclear project can go ahead, the construction
and other capital costs will have to be taken into account when deciding
if the practice is economically beneficial."

Charles Secrett, executive director of Friends of the Earth, said:
"We are pleased that the Appeal Court has overturned the worst features
of the High Court's judgment. But we are angry that this pointless,
dangerous and uneconomic MOX plant is still on course to open.

"It is not too late for the Government to see sense over MOX and change
its mind."

Stephen Tindale, executive director of Greenpeace UK, commented: "The
Government argued in court that the MOX plant made economic sense and
then promptly declared the plant a liability. They can't have it both
ways.

"The Government has no commonsense justification for opening a plant
that would only serve to spread plutonium around the world and increase
the danger of nuclear terrorism."

BNFL said in a statement following the ruling: "BNFL is pleased that
the Appeal Court has backed the decision of the High Court and rejected
the Friends of the Earth and Greenpeace claims.

"This is further support that the operation of the Sellafield MOX
Plant (SMP) is justified. We now have three judgments in favour of operating
the plant within the last three weeks.

"This is excellent news for the plant, the workforce and the local
community. It is time to let us get on with the important job of manufacturing
MOX fuel for our customers."